Norway has decided to pull out of a controversial World Bank fund that
actively promotes water privatisation in developing countries. Norway
has contributed $2,85 million to the Public Private Infrastructure
Advisory Facility (PPIAF) since 1999.

During a meeting with the Norwegian Ministry of Foreign Affairs
yesterday, representatives of the Norwegian NGO, the Association of
International Water Studies (FIVAS) and the British advocacy group,
World Development Movement (WDM), heard that Norway's contributions to
the fund would cease on the 30 June 2007.

WDM and FIVAS have published a new report entitled Down the Drain: How
aid for water sector reform could be better spent that investigates
the activities of PPIAF and shows how the fund actively promotes water
privatisation by the use of consultants. This is despite the fact the
strategy of water privatisation is widely acknowledged to have failed,
particularly for the poor.

The report also criticises the fund's consensus building activities
which involve persuading sceptics and opponents in developing
countries to accept the benefits of water privatisation. The authors
consider this interference in recipient countries' ability to conduct
a free and democratic debate on the issues.

TorbjÃ¸rn Urfjell, the political adviser for the Minister of
Development, Erik Solheim, said during the meeting that the Ministry
of Foreign Affairs no longer viewed the fund as a means to solve the
problem of access to water for the poor. The decision can also be seen
as following the intentions of the Government's Action Plan for
Environment in Development Cooperation that wishes to see water as a
common good, said Urfjell.

"This is good news," said Andrew Preston, director of FIVAS. "We're
not talking about a large amount of money in development terms, but
it's nonetheless an important and correct decision. We hope this will
send a signal to other donor countries, and not least the World Bank
itself, that there are better ways of using aid funds."

The report Down the Drain recommends alternative ways of increasing
access to water for the poor. The report suggests financial support to
strengthen the public sector through increased cooperation between
public water operators.